Retirement planning looks different today. If you're starting to think about your future, you might look to your parents’ or grandparents’ experiences for guidance. But in today’s retirement landscape, traditional pensions are less common, and savings often come from a combination of 401(k)s, IRAs and brokerage accounts. At the same time, questions about the long-term availability of Social Security can add to the uncertainty.
With so many moving pieces, feeling confident about your financial future can be challenging. That’s why it may be worth exploring annuities for retirement as an effective way to save through different life stages. Let’s take a closer look.
What's an annuity?
An annuity is a financial product that can help you grow and protect your money. People use annuities for different reasons, including:
- Protecting retirement savings from market losses, depending on the type of product.
- Growing tax-deferred assets.
- Creating reliable income streams in retirement.
Clearing up common myths
Annuities have been around a long time, and not all types are the same. You may have heard some common myths, such as:
- They’re only for people who are already retired.
- They’re only good for turning savings into income.
- They’re for people looking for low-risk options.
But those ideas are often outdated. In reality, today’s annuities can offer flexibility, growth potential and features that can help you through different stages of life—not just retirement.
A tool for every generation: How annuities can help at any age
No matter where you are in life, annuities could play a role in your financial goals. Here’s how they may fit, depending on your age:
Baby boomers (born 1946–1964)
You’re likely in retirement or getting close, and you may be looking for predictable income to cover daily expenses. The benefits of an annuity can include:
- Protecting your savings from market downturns while still giving it opportunities to grow.
- Creating steady, guaranteed income by offering flexibility and some downside protection.
Gen X (born 1965–1980)
You’re likely in your peak earning years, but you may also be juggling other responsibilities—like college savings, a mortgage or helping aging parents. As you look ahead, taking a degree of risk to build assets may be a good strategy—and some annuities may offer more growth potential, but with some downside protection as well.
Millennials (born 1981–1996)
Time is on your side. You’re likely still building your savings and may be more open to exploring new tools. Understanding how investments perform through market cycles can help you decide if adding an annuity now might support your long-term financial goals—not just for retirement, but for overall stability by:
- Growing your savings with tax-deferred benefits.
- Adding diversity to your portfolio.
- Providing a cushion during market downturns.
Looking ahead
Everyone wants to feel secure about their future. Annuities may help ease your worries about market volatility and supplement other savings and income sources. The best way to know if annuities may be right for you is to talk with a financial professional.
You can explore educational resources and learn how annuities could fit into your financial goals here.
Related reading:
What to bring to your first meeting with a financial professional
